5 guidelines for Board to lead effective organizational change

Business environment is constantly changing i.e. growing demand of goods and services, regulatory changes, leaping technologies, and ever increasing roles of stakeholders and the society affected by business operations. These are supportive reasons for organizations to transform and prepare to tackle future changes. However, many organizations came up with excuses to procrastinate time after time.

COVID-19 pandemic is the turning point that encourages a number of organizations to conduct serious transformation. Despite past success and outstanding growth, many organizations have realized that same old work procedures or conventional business models may no longer deliver success in the new world context. There are numerous examples of failed corporations both on the domestic and global scales.

To ensure business viability and drive future growth, leaders must emphasize organizational transformation that is in alignment with changing contexts. They need more comprehensive risk management, proper and timely strategy adjustment to cope with the situation, and maximum utilization of their competencies. While leadership is the crucial factor that can make the business and personnel in the organization “survive”, it too can push the business “down the abyss”. As top leaders of the organization, the “Board” must spot risks before anyone else and drive organizational transformation toward new and sustainable direction.

The Board must begin with the determination of direction and goals that include answers to questions like “What kind of growth? How much growth, and how to grow?”. Lacking of clear pre-determined direction would only lead to uncertainties and waste of resources.

5 Guidelines for Board to lead effective organizational change:
1. Sets the direction for transformation – The Board should be both “direction/framework setter” and “direction/framework tracker” to make sure the transformation can effectively create long-term value for the organization. Therefore, the Board should ensure that directions and goals are clearly identified.

2. Ensures total alignment – The Board should ensure that direction/framework and implementation are in total alignment or else relevant decisions and management implementation will be affected. The Chairman of the Board can play a part in ensuring total alignment while directors should ask challenging questions to point out any misalignment and provide timely remedy.

3. Manages its own and management’s hunger for growth and transformation – The Board should ponder the genuine necessity of transformation. As directors tend to be successful businessmen and hunger for growth, such desire must not affect their roles and responsibilities as Board member in challenging management’s proposals and ensuring that the transformation is in alignment with organization strategies. Meanwhile, the Board must also ensure that management dedicated their efforts and time in issues that will maximize organization benefits.

4. Reviews lessons learnt from transformation – The Board should ensure that the organization use lessons learnt to prevent similar mistakes or seek opportunities that will benefit the organization.

5. Continually improves its own effectiveness – The Board should continually improve its own effectiveness because the transformation and success of the organization hinges largely on competencies and effective decisions of the Board. Therefore, rigid revision of the Board’s effectiveness will ensure that the Board can successfully lead the organization to achieve its goals.

Modified from 5 Ways a Board Can Lead Change, Australian Institute of Company Directors

Benyada Kumlungsua
Senior CG Specialist – Training and Facilitators
Thai Institute of Directors Association (IOD)